1996 Annual Report

LABOUR MARKET CHAMBER

Terms of Reference

The Labour Market Chamber seeks to reach consensus and make agreements for placingbefore the Executive Council on all matters pertaining to the world of work and theassociated institutions of delivery.

Overview

The agenda of the Labour Market Chamber has encompassed issues at the centre oflabour-market policy in South Africa, and issues obviously central to the interests ofbusiness, labour and government.

In its very first months, as it was establishing itself, the chamber was immediatelyfaced with the daunting challenge of negotiating the labour relations bill, with thisexercise being completed by Nedlac in only 10 weeks (see earlier report). The chambercontinues with work on the implementation of the LRA, including the negotiation of certainoutstanding areas and ongoing requirements placed on it in terms of the Act. Other keyissues addressed in the past year have included consideration of various ILO conventions,agreement on the mine health and safety bill, and important research conducted into trendsin collective bargaining.

Key issues currently on its agenda include negotiations on an employment standardsgreen paper, and amendments to the Insolvency Act.

Forthcoming issues will include consideration of a green paper on employment equity, awhite paper on human resource development, and consideration of the findings of theComprehensive Labour Market Commission report. The chamber will also be considering thematters of occupational health and safety, social benefits, and public holidays.

Work Programme

Besides agreements reached and indicated elsewhere, the activities of the chamber overthe past year can be reflected as follows:

1. Implementation of the Labour Relations Act

The conclusion of negotiations on the labour relations bill was only the beginning ofthe relationship between Nedlac and this legislation. The LRA specifies a number of areason which Nedlac must be advised or consulted on an ongoing basis. Some of those alreadyconsidered include the governing body of the CCMA and the seat of the Labour Court. Otherswhich will come into effect with the implementation of the LRA in August 1996 are:

  • Nedlac is to consider applications for the registration of bargaining councils, specifically to consider the appropriateness of the sector and area for which the application is made, and demarcate the appropriate sector and area for which the bargaining council should be registered.
  • Nedlac may apply to the registrar to vary the registered scope of a bargaining or statutory council.
  • A commissioner of the CCMA must consult Nedlac before making an award in respect of a dispute over demarcation.
  • Nedlac is to receive notification of intended socio-economic protest action, and to consider the issue giving rise thereto.
  • Nedlac is to be consulted before:
    • Any new schedules are added to the Act or any schedule to the Act is changed.
    • A model constitution for a statutory council is added as a schedule to the Act.
    • The Minister of Labour makes any regulations in terms of the Act.

Areas of the LRA still outstanding for negotiation when talks were concluded were thedrafting of codes of good practice on picketing, codes for dismissals based on operationalrequirements and the determination of criteria for the demarcation of sectors and areas,and the demarcation of sectors and areas for statutory councils. Work on these areas is inprogress.

Crucial to the successful implementation of the Act is the process of educating itsusers. Government, business and labour have each planned a variety of education programmesand campaigns to popularise the Act, and information-sharing sessions have taken place inNedlac.

2. Collective-bargaining trends

Every year, particularly in the period April to August, trade unions and employersengage in collective bargaining over wage rates and conditions of employment. Thesenegotiations have an enormous impact on the quality of life of millions of workers andtheir families, and on the prospects for companies to be productive and competitive.

In 1995 it became apparent, particularly after the reaching of a national agreement inthe auto sector, that there were many innovative ideas being explored to accommodate boththe interests of workers to improve their conditions, and the interests of companies torestructure and compete successfully in a global economy. Consequently, in August 1995,Nedlac held a workshop which examined overall trends in wage settlements, with a focus onthe auto-manufacturing agreement. This agreement, which was lauded as a landmarkagreement, provided for a number of innovative features, including a three-year period ofagreement, a linkage between wage rates and skill levels, as well as broadbanding andskills training.

Following the workshop, the need for a more comprehensive look at trends in collectivebargaining was identified, and the Labour Market Chamber decided to commission research.The research report which was subsequently produced and publicly launched in March 1996presents an analysis of trends and innovations in collective bargaining over the last twoyears. The report represents the first attempt ever undertaken in South Africa to describewhat is taking place in collective bargaining across all sectors of the economy.

The findings of the report reflect the content of agreements which have been signedbetween employers and trade unions on a variety of issues. A wide range of agreements atplant, company and industry level are included. Practices which are not reflected informal agreements are not covered.

The report is divided into two volumes. Volume One provides a commentary on innovationsand trends in collective bargaining. This is broken down according to theme. The secondvolume is a resource document which lists the actual clauses of the agreements for eachtheme. This can be used for reference purposes, and is especially useful to anyone tryingto identify agreements that have been reached on a particular issue.

Volume One starts out by noting that while overall industrial- relations trends can beidentified, there are significant differences between sectors. These differences placelimits on the extent to which agreements from one sector can be duplicated in another.Working hours, skill requirements, and the determinants of productivity all differsignificantly between sectors, and the agreements surveyed reflect these differences.Within limits, however, it is possible to diffuse ideas on particular issues across theindustrial-relations environment.

The report goes on to summarise and analyse the content of agreements on 17 differentthemes. These are:

  • Aids and health and safety.
  • Worker participation in decision-making.
  • Wage gaps, grading and performance-related increases.
  • Training.
  • Benefits.
  • Job security.
  • Productivity and profit-sharing.
  • Period of agreements.
  • Affirmative action.
  • Flexibility in hours of work.
  • Industry policy.
  • Workplace and organisational restructuring.
  • Subcontracting, outsourcing, casualisation and temporary labour.
  • Levels of bargaining.
  • Union capacity.
  • RDP commitment.
  • Independent mediation and arbitration.

Two broad issues which precipitate the signing of agreements on a range of issues areidentified. The first arises from an attempt to create stability on the shop-floor, reduceconflict, and meet social and political expectations. The second arises from theimperative to meet economic pressures and, in particular, to gear industry for theincreased competition resulting from the opening up of our economy.

The report looks at the possibilities for innovations in collective bargaining andsocial partnerships at the national level. It is noted that there are four broad areas inwhich collective-bargaining issues could relate to a national-level social partnership.These are social wages (retirement incomes, housing, transport, health and education),productivity arrangements, savings and investment policies, and industrial policy. In allthese areas it would be possible to make national-level agreements that would set anoverall direction and affect the shape of collective bargaining.

The report concludes with a discussion of the possibility of continued research oncollective-bargaining trends through Nedlac. The report raises a range of issues forconsideration by unions and employers at company level, sectoral level, and at the levelof the Labour Market Chamber. These issues are to be taken forward by the chamber.

3. Employment standards

A green paper on employment standards was released by the Department of Labour inFebruary 1996, and has been tabled in Nedlac for negotiation. The green paper looks at thesetting of minimum employment standards in both organised and unorganised places of work,with the aim of drafting an employment standards statute.

The statute would set minimum standards for leave, working hours, overtime, maternityleave, notice periods, and unfair dismissals. The green paper contains proposals on thesetypes of issues in order to facilitate a debate on appropriate standards that wouldbalance basic rights for all workers with the need for employment creation.

The Labour Market Chamber has established a special committee under the auspices of thechamber for purposes of negotiations on the green paper. Agreements concluded in Nedlacwill form the basis of a draft employment standards bill.

4. Insolvency Act amendment

A proposed amendment to the Insolvency Act is currently under consideration in thechamber. The amendment seeks to bring the Insolvency Act in line with ILO convention 173(protection of workers' claims) by firstly extending the category of workers' claims thatare privileged, and secondly by increasing the privilege enjoyed by workers' claims.

5. Unemployment Insurance Fund Act amendments and restructuring of the fund

An amendment to the Unemployment Insurance Fund (UIF) Act, aimed at providingshort-term solutions to deficiencies in the Act, was considered but not supported byNedlac's Labour Market chamber during 1995. The chamber was of the view that considerationof the amendment should be located within the debates of a stakeholders' forum convened bythe Department of Labour. The stakeholders' forum is tasked with developingrecommendations on a comprehensive restructuring of the UIF. Any proposed legislative orpolicy changes recommended by the forum will be tabled in Nedlac.

6. The harmonisation of labour laws

The Integration of Labour Laws Act was promulgated to standardise labour legislationand regulations throughout South Africa following the dissolution of the independentstates and self-governing territories. The Labour Market Chamber established asubcommittee to consider regulations arising from the Act before these were promulgated.

7. The Wage Board

The Wage Board investigates employment conditions and wage levels in various sectorsand makes determinations setting minimum wages in those sectors. In 1995 the Wage Boardwas not functioning despite an urgent need for investigations in certain sectors. Further,the long-term future of the Wage Board was uncertain pending new legislation and thefindings of the Comprehensive Labour Market Commission.

The Labour Market Chamber was requested to nominate representatives to serve on theWage Board in a part-time capacity. Those nominated are Professor Philip Mohr and MrInthiran Moodley. An official of the Department of Labour is acting as chairperson untilagreement is reached on a chairperson.

8. The National Training Board

The NTB was established to advise the Minister of Labour on matters related totraining, and has recently been the principal agency for developing a national trainingpolicy. In order for the NTB to fulfil its responsibilities in this regard it wasnecessary that it be restructured in order to make it more representative. The LabourMarket Chamber was requested to nominate five employer representatives, five labourrepresentatives, and five community representatives to the NTB. The nominees were:

  • Labour: Mr P. Zondo, Mr A. Matlole, Mr M. Tshela, Mr M. Ryan, Mr L. Mochibidane.
  • Business: Ms J. Lopes, Rev. V. Mehana, Mr R. Johnson, Mr M. van Niekerk, Mr B. Philips.
  • Community: Ms P. Gquirana, Mr P. Ntlonti, Mr M. Toni, Ms M. Hanekom, Mr C. Mthombeni (or his nominee).

The chamber was also requested to nominate a chairperson and two vice-chairpersons, oneeach representing labour and business. The nominees for vice-chairpersons were: Dr A.Dippenaar (business) and Mr S. Morotoba (labour). The chairperson has not been finalisedand the two vice-chairpersons are rotating as chairperson.

The Year Ahead

Besides the issues currently on the chamber's agenda, key issues to be considered inthe year ahead will include:

  • A green paper on employment equity.
  • A white paper on human resource development.
  • The Comprehensive Labour Market Commission report.
  • Occupational health and safety.
  • Social benefits.
  • Public holidays.

 

NEDLAC - BUILDING BRIDGES THAT HOLD THE NATION TOGETHER
www.nedlac.org.za | Tel: +27 11 328 4200 | Contact webmaster | Sitemap